The words "cheap" and "artificial intelligence" aren't usually found in the same sentences. There's a lot of hype around the industry, and many of the stocks in it have elevated expectations because the companies are doing so well. However, there are a handful that I think are fairly cheap right now, and I have the stats to prove it.
Three that are on the top of my buying list are Microsoft (MSFT +0.42%), Meta Platforms (META +0.68%), and Nvidia (NVDA -0.85%). All are mainstream artificial intelligence (AI) businesses, but based on their valuations, they look like bargains.
Image source. Getty Images.
Microsoft
Microsoft used to be one of the better-performing AI stock picks, but it has struggled in 2026, as its share price has declined by more than 20%. However, that doesn't match the results the business has been generating.
NASDAQ: MSFT
Key Data Points
Microsoft's AI business now has an annual run rate of $37 billion and grew 123% during its past quarter. Azure, the company's cloud computing segment, grew revenue 40%, showcasing strong demand for its AI computing power. Those aren't growth rates you would normally associate with a sagging stock.
The company's fiscal 2026 ends on June 30, so using 2026 earnings projections to value the stock doesn't fully do it justice. If we use its projected fiscal 2027 earnings, we get a clearer picture of the stock's value.
MSFT PE Ratio (Forward) data by YCharts; PE = price to earnings.
At 20.4 times expected fiscal 2027 earnings, Microsoft is priced at a discount to the S&P 500, which trades for 21.5 times forward earnings. Yet the company has a much better track record of evolution than an average S&P 500 business and is growing far faster. I think this leaves plenty of room for upside, making Microsoft stock a smart buy now.
Meta Platforms
Meta Platforms' stock is even cheaper on a forward earnings basis than Microsoft's. It operates on a standard calendar, so using 2026 projections to value the shares is fine.
META PE Ratio (Forward) data by YCharts.
Meta is spending big on its AI capabilities, but at its core, it's still an advertising business. Most of its revenue comes from sales of ad space on its social media platforms (Facebook, Instagram, Threads, and WhatsApp). This is a wildly successful business, and it grew its revenues by 33% during its most recent quarter. However, the market is becoming somewhat skeptical about whether it will get a good return on investment from its huge AI spending.
If investors get news of a successful AI product from Meta, then the stock is primed to spike. Even without that, it's a rock-solid advertising business trading at a big discount to the broader market, making it a great stock to consider buying now.
Nvidia
For some reason, many investors consider Nvidia to be overvalued. But that's far from the case. Its fiscal years end in January instead of December, but that still allows us to use the current fiscal year's estimates as a meaningful forward-looking gauge.
NVDA PE Ratio (Forward) data by YCharts.
At 23 times estimated earnings for this fiscal year, Nvidia is marginally more expensive than the S&P 500. However, with Wall Street estimating that its growth will be 41% next year, Nvidia looks set for a great 2027.
NASDAQ: NVDA
Key Data Points
None of that forecast growth is priced into the stock yet, so investors can buy now with the expectation that it will rise through the rest of this year and into 2027 if those projections pan out.
With Nvidia's market position and the strength of the AI build-out, I think Wall Street's projection is actually near the bottom end of what it will deliver, making it a great stock to buy now and hold for a few years.
